Actual share repurchases, price efficiency, and the information content of stock prices

Busch, Pascal ; Obernberger, Stefan

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Document Type: Article
Year of publication: 2017
The title of a journal, publication series: The Review of Financial Studies
Volume: 30
Issue number: 1
Page range: 324-362
Place of publication: Cary, NC ; New York, NY
Publishing house: Oxford University Press
ISSN: 0893-9454 , 1465-7368
Publication language: English
Institution: Außerfakultäre Einrichtungen > Graduate School of Economic and Social Sciences - CDSB (Business Studies)
Business School > ABWL u. Corporate Finance (Maug 2006-)
Subject: 330 Economics
Abstract: We examine the impact of actual share repurchases on stock prices using several measures of price efficiency and manually collected data on U.S. repurchases. We find that share repurchases make prices more efficient and reduce idiosyncratic risk. Further analyses reveal that the effects are primarily driven by repurchases in down markets. We conclude that share repurchases help to maintain accurate stock prices by providing price support at fundamental values. We find no evidence that managers use share repurchases to manipulate stock prices when selling their equity holdings or exercising stock options.

Dieser Eintrag ist Teil der Universitätsbibliographie.

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